My name is Jaya and i am starting my first multi family investment property. I signed a contract for a property in Steelton PA as this was the only 4 unit property that was within my price range. I did the numbers reading all the basics from the BP forum. Now it is time to execute i am getting cold feet as i literally dont know anything about Steelton. It is 10 minutes from Harrisburgh and the house is 100% occupied and looks pretty decent.
Can anyone please who knows the area chime in here and give me pros and cons about this deal?
So you are just blindly going into a deal, in an area that you don't know?
Why are you looking in Steelton, PA? Are you local to there? Did you find it Randomly?
There are a multitude of questions...
Some off the top of my head.
Have you looking into the eviction process for the area?
How long have tenants been there? Do they all have security deposits?
Are there a lot of rentals in the area?
Do Vacancies fill up quickly?
Hows the area at night?
Are you managing yourself?
Rents on the rise in that area?
Are there jobs to keep your tenants paying?
What's your tolerance for risk?
I live 1 hour away from Steelton.
1. Eviction process takes about a month and always almost in favor of the owner
2. 2 units - 2 yrs, 1 unit - 1 year and other 2 months ago. All have security deposit n have leases
3. I don't see any rental signs. I looked online not many places up for rental.
4. I don't know about night time.
5. Utilities are included in the rent.
6. I am hiring property manager and I included that in the expenses
7. Rents are steadily rising
8. Even if I rent 2 units I will pay the mortgage
9. Jobs are from Harrisburg
I don't know how the area is that's the only disadvantage
Born and raised in Phila PA and I've ventured in most areas of the Keystone State yet there are still townships and cities that I never heard of and Steelton is one. At first I thought you meant to type 'steel town' as in Pgh. Sorry about that... Hope everything works out for you.
I admire your desire to get started! Steelton has a few nice neighborhoods, however, this is not necessarily the most desirable investment location. It was a former steel town which companies abandoned years ago. Rents may increase a bit over time, but appreciation will, IMO, be hard to achieve here. The Harrisburg area is a decent market, but there are a lot of areas you want to avoid. Without knowing much about your property it is hard to comment, however, I would proceed with caution in future investments.
Know the area you are investing! Don't get yourself into a bad situation simply because it is in your price range. There are a lot of "affordable" properties around here, but most you'd want to pass on.
Take it slow. If you can't afford the area you want to invest in, then save more, find a partner or get creative in some other way. BP is full of good resources and a bunch of great people willing to help.
Steelton is right by the Susquehanna river, did you check your flood maps? and flood insurance premiums? With all that biggert-waters act stuff, Steelton could be a disaster.
I'm local - but did not grow up near Harrisburg.
Similar test scores to Harrisburg schools, but a much higher graduation rate. So the culture respects education, but the education quality is poor.
The property i am buying is in a decent street and i talked to lot of landlords who currently own properties in Steelton and they all have positive things to say. Also they are easily able to rent their own properties. I agree that it was once a steel town and does have a run down look. But as per property managers around the area people with children tend to come to Steelton rather than Harrisburgh.
I can still get out of the contract but the numbers look good and i am going to trust my instincts with this. Property is definitely not in a flood zone.
Please advice if i am missing anything. Currently property is 100% occupied. I am a scared but i want to take the first step.
So current rent roll is
|Net Operating income 15058|
|Debt Service $7,393.62 |
|Income/Debt Ratio 2.04|
hi @Jayagowri Deenadayalan I know this is a old post, but wanted to know how steelton worked out for you. Did you move forward with the deal? Did you find a good property manager?
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